February 2023 Contract Awards Dip Slightly; Still Up More Than 33 Percent From 2019-21 Average Levels

What happened: Highway contract awards in February declined six percent from the previous year (from $5.4 billion to $5.1 billion) but still jumped 14 percent on a year-to-date basis (from $10.2 billion to $11.6 billion). Bridge awards dropped 38 percent through February (from $5.6 billion to $3.5 billion), due to abnormally high activity in January 2022. Awards for both modes are still up more than 33 percent over average levels from 2019-21, before enactment of the Infrastructure Investment and Jobs Act (IIJA).

Why it matters: Contract awards are a leading indicator of future construction activity. Increased funding from the IIJA drove a record year in 2022, with total annual awards soaring 25 percent. Through February, highway awards continue to grow over these record levels. Data from the first quarter – a slower season for construction – can be a volatile predictor of full calendar year activity, so it’s still early to predict how the rest of 2023 will unfold.